This paper was for my International Business Law (IBS320) class back in the Spring of April 2009. This paper goes into detail about the art of counterfeiting currency, as well as trademark infringement cases from Apple to FBI and Chinese seizures. In my opinion, it is an interesting topic and well written paper. There is no Power Point associated with this paper, but I think it would have been a great Power Point to make if it was demanded by the professor.

1. Thomas
Digitally signed by Thomas Liquori
DN: cn=Thomas Liquori,
email=thomasliquori@aol.com,
6/21/2009
Liquori
o=thomasliquori.me, l=New York,
NY
Date: 2010.09.05 19:06:48 -04'00'
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THE ACT OF COUNTERFEITING
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Professor Greer (IBS 320) | Thomas Liquori

2. The Art of Counterfeiting 2
Counterfeiting is one of the oldest crimes in American
history, especially when it comes to the forgery of currency. But
counterfeiting is not limited to just money, the exact definition
of counterfeiting as stated online by Wikipedia.com is, 1“A
counterfeit product is an imitation which infringes upon a
production monopoly held by either a state or corporation.
Goods are produced with the intent to bypass this monopoly and
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thus take advantage of the established worth of the previous
product. The word counterfeit frequently describes both the forgeries of currency and documents,
as well as the imitations of clothing, software, pharmaceuticals, watches, electronics, and
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company logos and brands. In the case of goods it results in patent infringement or trademark
infringement”.
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Counterfeiting is so widespread today, some experts say that if we decriminalized and
legalized counterfeiting, that this act could be beneficial to our country as well as the economy as
long as it is controlled and taxed. 2The proponents for decriminalization believe that the new tax
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revenues produced would help support schools, healthcare, and the impoverished, ease the pain
of taxpayers, and reduce the deficit. They also believe that transgressions such as these will take
place no matter, but, if properly regulated, would be safer for society in general. It would be a
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win, win situation. On the other hand, skeptics believe that the monetary costs for counterfeiting
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not only effect the lost revenues’ for companies as well as lost of tax dollars, but as stated in an
article in the nytimes.com on March 16,2009 by Jennifer Lee, 3“a person’s use of counterfeit
merchandise may influence other moral behavior in his or her life”. So, which side of the fence
does that leave the American people in this battle? Each person has to make up their own mind to
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decide which the most beneficial route is for them with the least consequences for their life and
their country.
When it comes to counterfeiting, people seem to think of only one thing, currency. The
forgery of money goes back to the 1800’s and at some periods it was considered treasonous and
1
http://en.wikipedia.org/wiki/Counterfeit
2
http://www.americanthinker.com/2009/05/time_to_legalize_counterfeitin_1.html
3
http://cityroom.blogs.nytimes.com/2009/03/16/the-moral-costs-of-
counterfeiting/?scp=1&sq=counterfeiting&st=cse
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3. The Art of Counterfeiting 3
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was punishable by death. During the American Revolution war counterfeiting was such
widespread by the British in such large amounts that soon the Continental Currency became
worthless. There is a saying that is still used to this day, “Not worth a Continental” became a
popular expression, and during the Civil War, almost one half of the currency in circulation was
counterfeit. At that time, approximately 1,600 state banks designed and printed their own bills.
Each bill carried a different design, making it difficult to detect counterfeit bills from the 7,000
varieties of real bills.
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A national currency was adopted in 1862 to resolve the counterfeiting problem. However,
the national currency was soon counterfeited and circulated so extensively that it became
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necessary to take enforcement measures. Therefore, on July 5, 1865, the United States Secret
Service was established to suppress the wide-spread counterfeiting of this nation's currency.
Although the counterfeiting of money was substantially suppressed after the establishment of the
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Secret Service, this crime still represents a potential danger to the Nation's economy. Today,
counterfeiting once again is on the rise. One reason for this is the ease and speed with which
large quantities of counterfeit currency can be produced using modern photographic and printing
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equipment.
For years China has become the capital for counterfeit rings. Counterfeiting in China has
given the country a bad name in my opinion, because to me every time I think of China, I think
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of the counterfeit products being imported to this country from the trademark infringement giant.
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Having been to China numerous times I have seen almost every type of product that could be
counterfeited from golf clubs and handbags to toilet paper. Trademarks as defined in the
International Business Law and its Environment textbook defines the term as, 5“trademarks and
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service marks are protected under NAFTA for ten years and can be renewed indefinitely. The
owner of a registered trademark has the right to prevent others from using identical or similar
signs for goods or services if it would result in a likelihood of confusion (which is presumed
unless the offender can prove otherwise). NAFTA requires fair procedures for obtaining a
trademark, including notice and an opportunity to be heard. Registration may be canceled if the
trademark is not used for an uninterrupted period of at least two years.
4
http://www.ustreas.gov/usss/counterfeit.shtml
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International Business Law and its Environment P. 484
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4. The Art of Counterfeiting 4
With that being said, the term trademark infringement derives from the definition of, 6a
violation of the exclusive rights attaching to a trademark without the authorization of the
trademark owner or any licensees (provided that such authorization was within the scope of the
license). Infringement may occur when one party, the "infringer", uses a trademark which is
identical or confusingly similar to a trademark owned by another party, in relation to products or
services which are identical or similar to the products or services which the registration covers.
An owner of a trademark may commence legal proceedings against a party which infringes its
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registration.
There have been many filings of lawsuits against trademark infringers over the past
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decades. Some notably popular cases have been Adidas VS Payless back in 2008, where Payless
had to pay Adidas a sum of $304.6 Million dollars for willfully infringing on Adidas America
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Inc.'s three-stripe trademark logo. Another case, Apple Corps VS Apple
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Computer, lasted from 1978 all the way until recently in 2007. Over the years
there were many lawsuits against Apple Computer for trademark infringement
against the Beatles founded holding company Apple Corps. In 1978 Apple Corps
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sued Apple Records for trademark infringement and was settled under a disclosed
amount of $80,000. The agreement was that Apple Computer was not going to
incorporate any music within their company, but in 1986 Apple Corps again sued
Apple Computer for violation of the 1981 settlement agreement. They stated that Apple
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Computer added an audio recording sound chip to their computers, clearly violating the
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agreement, and Apple Corps won the settlement and effectively spelled the end to the future of
the highly profitable multimedia field that Apple was pursuing.
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Again in 1991 Apple Corps when another suit against Apple Computer in
the amount of $26.5 Million dollars for including a sampled sound system in their
Macintosh operating system. In September of 2003 Apple Computer was yet again
at the turmoil of Apple Corps. This time the company was being sued for breach of
contract for using the Apple logo in the creation and operation of Apple Computer’s
ITunes music store. On May 8th 2006, a judge ruled in favor of Apple Computer stating there
6
http://en.wikipedia.org/wiki/Trademark_infringement
7
http://en.wikipedia.org/wiki/Apple_Corps_v._Apple_Computer
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5. The Art of Counterfeiting 5
was no breach of contract had been demonstrated. This act led to the day of February 5th 2007,
where Apple Inc. and Apple Corps settled their dispute by selling Apple Inc. all of the
trademarks related to “Apple” for an amount of approximately $500 Million dollars. This is just
a sign that trademark infringement is not isolated to just China, but actually in our own
backyards. In the end I feel that trademark infringement worked out for the better in this case
because a large amount of people use the companies services (if not everyone, in one way or
another); so it was actually beneficial to society in modern day.
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The ugly side behind counterfeiting can be argued when the stealing of a person’s
identity comes into play. There are numerous counterfeiting rings all over the world that try to
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steal your information in order to forge credit cards and wipe out a person’s credit. Recently in
an article in the Dailynews.com of Los Angeles California dated March 13th, 2009 by Sue Doyle,
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a hidden room was found under a Sunland home in Los Angeles where equipment was allegedly
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used to manufacture credit cards. These manufactured credit cards were used to buy high end
television sets, as well as computers and even a speed boat and a Rolls Royce. The person under
arrest, Jose Carillo, is suspected to be the major player in the identity thief ring and faces many
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counts of felony charges. Officials state that the ring victimized as many as 10,000 credit card
holders and are still on the hunt for the mastermind.
Another negative side to counterfeiting in my opinion would have to be the trademark
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infringement against companies that benefit off the names of the existing products. Everyone
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knows so well that high end merchandise such as handbags and software have been seized and
confiscated over the years by customs’ agents patrolling the
imports that are coming into our country. This holds true to an
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FBI and Chinese seizure that occurred on July 24th 2007 where
authorities claim that they seized over $500 Million dollars
worth of Microsoft and Symantec computer software. As stated
in the Nytimes.com article dated July 25th 2007 by David
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Barboza and Steve Lohr, “This is the biggest software
counterfeiting organization we have ever seen by far,”
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http://www.dailynews.com/search/ci_11901445?IADID=Search-www.dailynews.com-www.dailynews.com
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http://www.nytimes.com/2007/07/25/business/worldbusiness/25soft.html?scp=1&sq=software%20counterfeit
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6. The Art of Counterfeiting 6
Microsoft’s associate general counsel for worldwide piracy and counterfeiting issues, David
Finn, said. “This is a real milestone.” The Los Angeles field office of the F.B.I. conducted two
dozen searches of suspected distributors of pirated software, seizing $2 million in software and
$700,000 in other assets.
When it comes to trademark infringement products
such as clothing and accessories, this type of infringement
to me is the most profitable to the infringer. Not everyone
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can afford a $1,000 Louis Vuitton handbag or even a $400
Coach handbag, so why not get a knockoff? In my own
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opinion, I do not think that there is anything wrong with
purchasing or replicating a designer manufactured item.
These companies make millions upon millions of dollars
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each year and they use a good portion of their money to combat anti counterfeiting units to seize
and shut down anyone who is infringing on their trademarks. So is the seizure that happened
here in New York City on Canal Street back on February 26, 2008. The article that I found in the
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Nytimes.com website dated February 26, 2008 and written by Sewell Chan, 10”stated that
investigators raided dozens of storefronts on a triangular block in Chinatown this morning in
what officials described as a major seizing of counterfeit goods; including fake Rolex, Coach,
Prada and Gucci products, with an estimated street value of more than $1 million.
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Mayor Michael R. Bloomberg and Police Commissioner Raymond W. Kelly, who
announced the raids, also said that the city had obtained a temporary restraining order to shut the
storefronts”. The investigation uncovered counterfeits of such brands as Coach, Gucci, Dolce &
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Gabbana, Dior, Prada, Rolex, Fendi, Burberry, Calvin Klein, Dora the Explorer and Oakley. The
building addresses in the “Counterfeit Triangle” that were raided today are 224–230 Canal
Street; 232 Canal Street; 234–238 Canal Street; 106 Baxter Street; 112–116 Walker Street; 118
Walker Street; 120-124 Walker Street; and 152-156 Centre Street.
10
http://cityroom.blogs.nytimes.com/2008/02/26/city-raids-counterfeit-triangle-shutting-32-
storefronts/?scp=4&sq=handbag%20counterfeit&st=cse
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7. The Art of Counterfeiting 7
Some experts argue that the sales of counterfeit goods are linked to terrorism. In an
article by the Nytimes.com dated February 12th 2007, the article states that 11“Fake designer bags
are part of a $500 billion global trade in counterfeit goods, and the U.S. authorities say that some
of that money is funding terrorism. In the year between October 2005 and September 2006, the
Department of Homeland Security made 14,000 seizures of counterfeit goods worth a total of
$155 million. In New York alone, the trade was worth $80 billion and it costs to the city
approximately $1 billion a year in lost sales tax revenue."It's virtually all profit and it isn't
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funding anything good," the city police commissioner, Raymond Kelly, told a conference on
counterfeiting this month. "It is a threat to democracy and a threat to the rule of law."
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In conclusion, I believe
that we have a long way to go to
convince our government that
counterfeiting should be
legalized. I do not think that the
government will ever allow the
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legalization of counterfeiting,
because if they do, then actually
the government will have a lot
less control over the consumers in the country and eventually there will be no need for our type
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of government anymore. 12If universal counterfeiting ever was legalized it would prove to be the
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ultimate stimulus package for the economy. Employees would always have enough money and
never have to go on strike. Citizens would have no trouble paying their mortgages and never face
foreclosure. Everyone would gladly pay his or her taxes and there would be no need to have an
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IRS. Free market consumerism would return with a flourish. People would purchase whatever
they wanted and stores would only have to worry about having enough merchandise on hand.
Stores could charge the consumer whatever they wanted and the consumer could still afford.
Every shopping day would be like the day after Thanksgiving and the day before Christmas.
11
http://www.nytimes.com/2007/02/12/business/worldbusiness/12iht-
fake.4569452.html?scp=7&sq=international%20business%20and%20counterfeiting&st=cse
12
http://www.americanthinker.com/2009/05/time_to_legalize_counterfeitin_1.html
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8. The Art of Counterfeiting 8
Unfortunately, this will not be the case in the near future anytime soon, as the economy
weakens then strengthens and continues to gain control of the country again, counterfeiting and
trademark infringement will continue to flourish among society who have the craving for high
end products but have limited means of income to satisfy their desires.
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June 21, 2009